The Random Comic Strip

The Random Comic Strip

Words to live by...

"How beautiful it is to do nothing, and to rest afterward."

[Spanish Proverb]

Ius luxuriae publice datum est

(The right to looseness has been officially given)

"Everyone carries a part of society on his shoulders," wrote Ludwig von Mises, "no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interest, must thrust himself vigorously into the intellectual battle."

Apparently, the crossword puzzle that disappeared from the blog, came back.

Saturday, January 8, 2011

"Please Sir, I want some more"

I once remarked to a friend that my theory was that the difference between a recession and a booming economy was about 2 percentage points. I basically invented that "2 percentage points" difference. I have no foundation or experience in macro-economics. To be honest, I am not very good at managing my own micro-economics; I spend too much, I save too little, and was never good at keeping tabs on it all. This may be the reason that both wife vers. 1.0 and wife vers. 2.0 just happened to be good with such things. I need a CFO around the house or I'd be broke most of the time.

My youthful understanding of economics was similar to my "Theory of Girlfriends". The "Theory of Girlfriends" states that if you have a girlfriend, you will attract new prospects for same; if you do not have a girlfriend, no one will date you. If I had money, opportunities to get more would appear; If I did not have money, no opportunities could be found.

However, that lack of financial acuity has never kept me (or, apparently, most everyone else) from criticizing how the economy is being run by the government. Let's be fair, the government doesn't actually run the economy. It sets a tone, it encourages or discourages growth though various policies and legislation but we really do have a market economy, not a centrally planned one. Yet that is exactly who we blame for a bad economy and who we expect to get us out of a hole they, presumably, dug for us all.

Over the years, my economic theories have increased in complexity. I no longer see a direct correlation between having money and good opportunities to get more. The relationship is still there, mind you, it's just not absolute. Days and nights spent in casinos have taught me that. Dabbling in the stock market reinforced that complexity.

Government, in my view, can only put up roadblocks or smooth the way for the economy. And I think there are a couple of ways these are done. First is tax policy. The second is enforcement of laws.

Currently, we have two major political parties and these are in the process of being defined ideologically as "liberal" (Democratic) and "conservative" (Republican). And the ideologies are also being further defined as "pro-labor" and "pro-business." Or "tax and spend" and "cut taxes and spend." That's right, neither party seems to want to actually cut spending. Neither one actually cuts taxes, either, they just increase them or move them around or, more likely, both increase them and move them around so it appears that taxes were cut when they were actually raised. You also need to know that cutting spending is defined as not increasing spending on various things by as much as you wanted is called "spending cuts" or "gutting [insert popular program here]."

It's a political charade wherein politicians can claim they voted for (or supported) lower taxes and tried to cut spending while also claiming their political opponent was in favor of uncontrolled fiscal government growth.

Much of this reminds me of my mother. She would remark from time to time about credit cards. She said she never had to worry about maxing out her credit card debt because "they always raise my limit before I reach it." And this is what Congress is about to do... raise the limit on their collective credit card. They are arguing over whether to raise the debt ceiling for the nation. They do this because they fear, as far as I can tell, that not doing so will mean the government will grind to a halt and we'll default on our debts.

Now you and I (who cannot simply tell the bank or credit card people to "gimme more!") do something different as we approach our credit limits. We start looking at what we can do without. We start cutting back on how much we spend and on what we spend it on. We prioritize. Congress does this also but they make everything the "number one priority."

I don't really think this new Congress will do anything differently.

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